"It is a hot topic, but mark-to-market
has had no effect on our company," Billings said.
At the hearing, the FASB said it would move quickly to issue a proposal on additional guidance for mark-to-market
For approximately 70 years after FDR's decision to suspend mark-to-market
accounting, banks and credit unions operated without M2M and the economy didn't have the threat of another depression.
accounting, the SEC requires that the value of corporate assets have to be accounted for and reported on the value they hold that day or that quarter, regardless of whether the holder plans to sell them or not.
In the fourth quarter alone, Emirates NBD said it booked mark-to-market
losses of Dh777 million and Dh372 million for its corporate and C retail businesses.
The IASB mark-to-market
rules have come in for a great deal of criticism in the current financial climate for exacerbating the losses suffered on many types of financial instrument.
, which is used all the time in the trading of New York City buildings, essentially requires that lenders assign a value to an asset based on its current market value, as opposed to a more traditional hold-to-maturity model that uses historical income and other criteria for valuing assets.
In April Schroders said it had taken an unrealised mark-to-market
writedown of pounds 25.8 million on US mortgage and asset-backed securities in the first quarter.
Swiss Re is bogged down by serious missteps in the subprime credit swamp, with a 53% fall in first-quarter profit fed by structured credit default swaps that drained an additional mark-to-market
loss of 819 million Swiss francs ($786 million) from the reinsurer in the first quarter.
The firm's use of mark-to-market
accounting, a technique whereby expected future profit derived from the spread between long and short gas contracts would be taken as upfront earnings, is but one example.
However, they might be more willing to do this after the mark-to-market
features of accounting reform make the risk-reduction properties of a conservative asset allocation more apparent in the reported financials.
The risk weight for mark-to-market
funds for the purpose of regulatory capital is to be differentiated according to the funds' asset holdings in order to lower capital burden on AMCs with large funds.